Monterey County is running low on homes to sell.

The number of properties for sale, which industry folks call inventory, has dropped to nearly half of what it was two years ago.

Real estate agents say the reason for the change is a combination of recession-era foreclosed properties being quickly snapped up, stalled developments, water issues and a "momentum" of buyers motivated by low-interest loans.

"The demand has come up and supply is starting to drop," said Tim Allen, of Tim Allen Properties in Carmel.

There were 2,418 homes for sale in 2008 when foreclosed properties and short sales flooded the market, according to the Multiple Listing Service. Now, there are just 857 homes for sale in the county.

The market has been great for sellers. Total sales and average prices were up last year from 2011. Homeowners typically got what they asked for, or more.

"It's definitely positive," Monterey County Association of Realtors President Arleen Hardenstein said. "Buyers want to buy ... I think lack of inventory is the main challenge we are facing right now," said Hardenstein, an agent at Bratty and Bluhm in Pacific Grove.

Kim DiBenedetto, a Coldwell Banker Del Monte Realty agent who sells homes all over the county, said in the last three months of 2012 she was getting three to seven offers on many of her properties.

"That means there are two to six buyers that don't get a house," she said.

The biggest average sales price increases were in

Carmel Highlands, Carmel Valley and Seaside/Sand City.

DiBenedetto said the valley, where the average sales price increased by $114,274, was a "hot area of growth."

The biggest drops were in Pebble Beach, the Monterey Salinas Highway area and Carmel.

Judith Profeta, owner of Alain Pinel Realtors in Carmel in Carmel and Pebble Beach, said Pebble Beach's average sales price dropped by $114,209 because lower-end homes "sold like hot cakes."

She said the average low-end home in Pebble Beach was about $700,000.

North Salinas continued to have the most homes sold, 555, but Pacific Grove had the biggest single increase with 44 more homes sold this year.

DiBenedetto said Pacific Grove is popular with homeowners because it is "a charming town" and has a good school district.

The biggest drops in homes sold, which appeared to be brought on by decreased inventories, were East Salinas, Seaside/Sand City and South Monterey County.

For now, Profeta said it is a healthy balance between a buyers' and sellers' market.

She said it would not be a good idea to start construction on a bunch of homes.

"New housing starts are good, but not masses of new houses," she said, "because that's what dilutes the market."

Yet she said people on the fence about buying homes should act before it becomes a full-blown sellers' market.

"They're not going to have such great choices after a little while," she said.